#supervision – Federal Financial Analytics

6 09, 2023

Daily090623

Arezou Rafikian2023-09-07T09:07:08-04:00September 6th, 2023|2- Daily Briefing|

FSB Focuses on NBFI Liquidity, Leverage with Few Concrete Actions

Following its report recommending resolution-policy review, the FSB today continued its G20 reports with two focusing on NBFIs. The most substantive of these addresses sector liquidity. Recommendations here include adoption of pending OEF standards, continuing review of margining and work to determine if NBFI systemic-risk standards are warranted.

Fed Study: Big Bank Branches May Better Serve Customers

Fed staff have issued a report suggesting that new large bank branches tend to grow faster than new ones at small banks because large bank branches are favored by customers seeking lower prices or greater value.

IMF Outlines Post-SVB Supervision Standards

In an opaque but nonetheless stinging rebuke to U.S. bank supervision, the IMF today released a working paper emphasizing the importance of supervisors having the will and ability to act on effective supervision, recommending that supervisors are given strong operational independence and accountability, clarity regarding the primacy of their safety-and-soundness mandate, adequate resources, and legal protection.

Daily090623.pdf…

30 05, 2023

FedFin on: Enforcement Policy

Arezou Rafikian2023-05-30T17:09:49-04:00May 30th, 2023|The Vault|

Following a speech earlier this year by the Acting Comptroller arguing that some banks are “too big to manage” and the furor caused by recent failures, the OCC has significantly revised its enforcement policy. The new framework requires examiners promptly to intervene if any of a bank’s CAMELS scores slips to 3 for unsatisfactory or if the bank is what CFPB Director Chopra would call a “repeat offender” of law, rule, or express supervisory actions or found deficient in practices necessary to ensuring safety and soundness.

The full report is available to retainer clients. To find out how you can sign up for the service, click here and here.…

30 05, 2023

SUPERVISION2

Arezou Rafikian2023-05-30T16:54:05-04:00May 30th, 2023|1- Financial Services Management|

Enforcement Policy

Following a speech earlier this year by the Acting Comptroller arguing that some banks are “too big to manage” and the furor caused by recent failures, the OCC has significantly revised its enforcement policy. The new framework requires examiners promptly to intervene if any of a bank’s CAMELS scores slips to 3 for unsatisfactory or if the bank is what CFPB Director Chopra would call a “repeat offender” of law, rule, or express supervisory actions or found deficient in practices necessary to ensuring safety and soundness.

SUPERVISION2.pdf…

22 05, 2023

M052223

Eliza Allen2023-05-22T11:47:38-04:00May 22nd, 2023|6- Client Memo|

How to Ensure That Independent Study of Regulatory Mistakes Leads to Near-Term, Meaningful Redress and Reform

Last week, a moderate Senate Democrat was joined by a Republican in yet another letter demanding an independent investigation of regulatory actions related to recent bank failures. But, as the absence of specifics in any of these letters makes clear, it’s a lot easier to call for independent inquiry than to lay out how to conduct one that might make a meaningful difference. Precedent is not encouraging – for example, Congress created a Financial Crisis Inquiry Commission after 2008, but it was an unqualified waste of time and money. Still, we urgently need an independent assessment of what went so wrong combined with another providing near-term, actionable reforms. Having served on one post-crisis national commission that did a bit of good, I recommend separating the forensic inquiry from the one focused on the future, guarding against conflicts without eliminating expertise, and assessing only a few clear questions suitable for practical answers that can be readily accomplished under current law.

M052223.pdf…

22 05, 2023

Karen Petrou: How to Ensure That Independent Study of Regulatory Mistakes Leads to Near-Term, Meaningful Redress and Reform

Eliza Allen2023-05-22T11:47:33-04:00May 22nd, 2023|The Vault|

Last week, a moderate Senate Democrat was joined by a Republican in yet another letter demanding an independent investigation of regulatory actions related to recent bank failures. But, as the absence of specifics in any of these letters makes clear, it’s a lot easier to call for independent inquiry than to lay out how to conduct one that might make a meaningful difference. Precedent is not encouraging – for example, Congress created a Financial Crisis Inquiry Commission after 2008, but it was an unqualified waste of time and money. Still, we urgently need an independent assessment of what went so wrong combined with another providing near-term, actionable reforms. Having served on one post-crisis national commission that did a bit of good, I recommend separating the forensic inquiry from the one focused on the future, guarding against conflicts without eliminating expertise, and assessing only a few clear questions suitable for practical answers that can be readily accomplished under current law.

The first decision point determines all the rest: whether the independent analysis is to be forensic – who dropped which heavy ball on whose toes – or focused on the future – what we learned and what to do about it. Many of the proposals for an independent commission, including the Congressional letter noted above, want their commission to do both, but none could do so well and asking for this is thus asking for trouble.

A good forensic analysis will reduce the moral hazard enjoyed by federal supervisors long exempt …

18 05, 2023

REFORM226

Arezou Rafikian2023-05-18T16:16:02-04:00May 18th, 2023|5- Client Report|

Federal Regulators Lose Ground as Senate Banking Reviews Recent Failures

Describing the CEOs’ statements at his last hearing as “the dog-ate-my-homework” excuses for grievous failings, Senate Banking Committee Chairman Brown (D-OH) also attacked Republicans for placing blame on monetary policy, not the culture of supervisory laxity he details with various quotes from Trump Administration officials. Still, the panel’s legislative agenda seems limited to the executive-clawback measure we projected as the most likely outcome immediately after the mid-March failures (see Client Report REFORM218). Sen. John Kennedy (R-LA) countered that Vice Chairman Barr’s attribution of blame to Randy Quarles is the Fed coming up with a similarly-lame excuse for its recent failings.

REFORM226.pdf…

28 03, 2023

REFORM217

Arezou Rafikian2023-03-28T16:28:44-04:00March 28th, 2023|5- Client Report|

Senate Banking Demands Supervisory Accountability, Transparency, Reform

Today’s Senate Banking hearing was extremely well-attended by Senators on both sides of the aisle clearly looking first to understand what precipitated recent bank failures, who is to blame, and what should be done next. Republicans argued that current law gives the Fed considerable discretion without the need for statutory change. Although FRB Vice Chairman Barr initially sought to emphasize the need for new rules without blaming old ones, he ultimately admitted that the Fed indeed could and can govern risky banking organizations regardless of size.

REFORM217.pdf…

28 03, 2023

FedFin on: Senate Banking Demands Supervisory Accountability, Transparency, Reform

Arezou Rafikian2023-04-03T12:47:49-04:00March 28th, 2023|The Vault|

Today’s Senate Banking hearing was extremely well-attended by senators on both sides of the aisle clearly looking first to understand what precipitated recent bank failures, who is to blame, and what should be done next. Republicans argued that current law gives the Fed considerable discretion without the need for statutory change. Although FRB Vice Chairman Barr initially sought to emphasize the need for new rules without blaming old ones, he ultimately admitted that the Fed indeed could and can govern risky banking organizations regardless of size….

The full report is available to retainer clients. To find out how you can sign up for the service, click here and here.…

16 11, 2021

Daily111621

Arezou Rafikian2023-05-26T10:56:42-04:00November 16th, 2021|2- Daily Briefing|

Basel Proposes Global Climate-risk Management, Supervision Principles
As anticipated, the Basel Committee today proposed climate-risk management and supervision principles sure to guide both the Fed and OCC, even in just proposed form, as the U.S. agencies finalize near-term U.S. guidance in this high-priority arena.

FRB-NY Staff: U.S. Banks Now Even More Resilient
A new post from the Federal Reserve Bank of New York’s blog assesses bank resilience through the pandemic, concluding that large banks are even more resilient now than before thanks to post-2008 rules and post-2020 market backstops.

HFSC Republicans Condition CBDC on Stablecoin, Private Sector
HFSC Republicans have now laid out their principles for any U.S. CBDC, demanding that any Fed-issued CBDC maintain the U.S. Dollar’s reserve currency status and the U.S. payment system’s preeminence.

Senate GOP Tackles USPS Banking Pilot Program
Senate Banking Ranking Member Toomey (R-PA) today described postal banking as about the worst possible idea. Joined by other Republicans, Mr. Toomey wrote to the Postmaster General, questioning USPS authority to offer its recent pilot and challenging its mission-relevance.

CFPB Plans HMDA-Data Do-Over
Reflecting the President’s executive order on racial equity, the CFPB has now accelerated its fair-lending efforts with a request for views on how best to retool HMDA to better prevent mortgage discrimination.

FRB Presidents: Fund-Access, Financial-Literacy Improvements Needed
At today’s racism and the economy virtual event hosted by the Minneapolis Fed, FRB Atlanta President Bostic highlighted work by his Reserve Bank’s Special Committee on Payments Inclusion to show the Fed’s dedication in this …